Question:Ayala Inc. has conducted the following analysis related to its product lines, using a traditionalcosting system (volume-based) and an activity-based costing system. Both the traditional andthe activity-based costing systems include direct materials and direct labor costs.Total CostsSales Revenue Traditional ABCProductsProduct 540X $180,000$55,000 $50,000Product 137Y 160,00050,00035,000Product 249S 70,00015,00035,000For each product line, compute operating income using the traditional costing system:Product 540X $Product 137Y $Product 249S $

TRADITIONAL COSTING SYSTEM The traditional costing system is an accounting method used to determine…

Answered: Question: Ayala Inc. has conducted the…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Hi-Tek Manufacturing, Incorporated, makes two industrial component parts-B300 and T500. An absorption costing income statement for the most recent period is shown below: Hi-Tek Manufacturing, Incorporated Income Statement Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating loss Hi-Tek produced and sold 60,400 units of B300 at a price of $21 per unit and 12,800 units of T500 at a price of $39 per unit. The company's traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company's two product lines is shown below: Direct materials Direct labor Manufacturing overhead Cost of goods sold $ 1,767,600 1,212,922 554,678 610,000 $ (55,322) 8300 T500 $ 400,300 $ 162,400 $ 120,100. $ 42,400 Activity Cost Pool (and Activity Measure) Machining (machine-hours) Setups (setup hours) Product-sustaining (number of products) Other…
roduct Cost Method of Product Costing MyPhone, Inc., uses the product cost method of applying the cost-plus approach to product pricing. The costs of producing and selling 5,160 units of cell phones are as follows: Variable costs: Fixed costs: Direct materials $90 per unit Factory overhead $199,200 Direct labor 31 Selling and admin. exp. 70,300 Factory overhead 23 Selling and admin. exp. 22 Total variable cost per unit $166 per unit MyPhone desires a profit equal to a 13% rate of return on invested assets of $600,800. a. Determine the amount of desired profit from the production and sale of 5,160 units of cell phones.$fill in the blank 1 b. Determine the product cost per unit for the production of 5,160 of cell phones. If required, round your answer to nearest dollar.$fill in the blank 2 per unit c. Determine the product cost markup percentage (rounded to two decimal places) for cell phones.fill in the blank 3 % d.…
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Data table Units of D4H produced and sold 1. 2. Selling price 3. Direct materials (kilograms) 4. Direct material cost per kilogram 5. Manufacturing capacity (units of D4H) 6. Total conversion costs 7. 8. Selling and customer-service capacity 9. Total selling and customer-service costs 10. Selling and customer-service capacity cost per customer 11. Design staff 12. Total design costs 13. Design cost per employee Conversion cost per unit of capacity Alt+Q Print Done $ $ 210 41,000 $ 310,000 7.25 $ 250 2,125,000 $ 8,500 $ $ $ 2,150,000 8,600 95 customers 90 customers 900,000 10,000 12 1,045,000 $ 11,000 $ 12 1,212,000 $ 101,000 $ $ $ ZUZT $ $ ZUZZ 235 43,000 325,000 7.75 250 1,218,000 101,500 (similar to) Data table HW Score: 3.03%, 0.12 of 4 points Daint 0 10 of 1 Revenue effect of growth Cost effect of growth The company has chosen a product differentiation strategy. The growth, price- recovery, and productivity components of the change in operating income from 2021 to 2022 are as…
Coronado Inc. has conducted the following analysis related to its product lines, using a traditional costing system (volume-based) and an activity-based costing system. The traditional and the activity-based costing systems assign the same amount of direct materials and direct labor costs. Products Product 540X Product 137Y Product 249S (a) Sales Revenue $210,000 Product 137Y * Your answer is incorrect. Product 540X $ LA LA 166,000 LA 94,000 Product 249S $ Total Costs Traditional $59,000 For each product line, compute operating income using the traditional costing system. 49,000 17,000 160060 131040 ABC 53900 $49,940 34,960 40,100
Required: 1. Determine the unit product cost under: a. Absorption costing. b. Variable costing. 2. Prepare variable costing income statements for July and August. 3. Reconcile the variable costing and absorption costing net operating incomes.
Question: Pat Company uses activity-based costing. The company has two products: A and B. The annual production and sales for Product A is 1,800 units and for Product B it's 1,050 units. There are three activity cost pools, with estimated costs and expected activity as follows: Activities Estimated Expected Activity Overhead Cost Product A Product Total B Activity 1 $46,775 1,300 1,200 2,500 Activity 2 $68,277 2,300 1,000 3,300 Activity 3 $82,502 The overhead cost per unit of Product A under activity-based costing is closest to: 720 700 1,420 A. $139.12 B. $68.28 C. $32.88 D. $63.19
Assume you are the department B manager for Marley's Manufacturing. Marley's operates under a cost-based transfer structure. Assume you receive the majority of your raw materials from department A, which sells only to department B (they have no outside sales). After calculating the operating income in dollars and operating income in percentage, analyze the following financial information to determine costs that may need further investigation. Marley's ManufacturingIncome StatementMonth Ending August 31, 2018 Dept. A Dept. B Sales $21,000 $52,000 Cost of goods sold 9,870 27,040 Gross profit $11,130 $24,960 Expenses: Utility expenses $840 $3,120 Wages expense 5,040 10,920 Costs allocated from corporate 2,100 14,560 Total expenses $7,980 $28,600 Operating income/(loss) in dollars $fill in the blank 1 $fill in the blank 2 Operating income/(loss) in percentage fill in the blank 3 % fill in the blank 4 % Department B had…
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